The boss of Australia’s largest brick manufacturer has called for 400,000 traditional migrants to be brought into the country to solve the housing shortage.
Lindsay Partridge, director of Brickworks, said Australia’s immigration program needed to be refocused – rather than cut – so that the annual intake was made up of those who could build new homes.
“I just think they need to focus on tradies – they need to get 400,000 tradies,” he told Ny Breaking Australia.
‘Do you know how many people are involved in construction in Australia?
‘A million people are involved in construction.
“If you want to increase the number of homes you want to build by 25 to 30 percent, they need another 400,000 tradies for that.”
In the year leading up to September, 429,580 migrants moved to Australia, official data on permanent and long-term arrivals shows.
Australia’s largest brick manufacturer has called on 400,000 traditional migrants to come to the country to solve the housing shortage (pictured is Melbourne stair builder Paige Hunter)
Should these inflows continue, Australia’s net foreign migration inflow would exceed the Treasury’s forecast of 315,000 new arrivals in the May Budget for 2023-2024.
A record 500,000 migrants could arrive by 2023, which would double the mining boom of 2006 and 2007.
But with just 168,231 homes built in the last financial year, Australia is conservatively short of 140,000 new homes during a wave of immigration.
That’s based on homes housing an average of 2.5 people and 563,200 migrants and newborn babies, who make up Australia’s net population growth in the year to March.
Mr Partridge said carpenters and electricians would be better for Australia than other migrants, including those who arrived through the family reunification program.
“I have nothing against college graduates or family reunions, but they have nowhere to live,” he said.
‘It’s counterproductive. We need to focus on bringing in trades that can build homes so people have a place they can afford to live.”
With Australia’s rental vacancy rate at just one percent, Prime Minister Anthony Albanese announced in August a target to build 1.2 million “new, well-located homes” over five years, starting on July 1, 2024.
Brickworks managing director Lindsay Partridge (along with wife Robyn) says Australia’s immigration program needs to be refocused – rather than cut back – so that the annual intake is made up of those who can build new homes
This followed a National Cabinet meeting of mainly Prime Ministers and Chief Ministers from the Labor state.
But Mr Partridge said this seemed unachievable, even though it was “a great ambition”.
“We’re already a few hundred thousand behind before it even starts,” he said.
Mr Partridge told Brickworks shareholders on Tuesday that the target of 1.2 million was ‘far above historical levels’.
“While supply chain constraints may impact the ability to achieve this forecast, we expect strong demand for our construction products over the next decade,” he said at the annual general meeting.
Partridge’s doubts about the target were raised after Ray White’s chief economist Nerida Conisbee said Australia had never before built 1.2 million homes in five years.
“We have never built so many homes in a five-year period and unfortunately we are already off to a bad start,” she said earlier this month.
The closest was between 2015 and 2020, in the run-up to the pandemic, when 1.05 million homes were built at a time when more Chinese capital was flowing into residential apartment projects.
Rising construction costs have since led to a wave of bankruptcies among housing construction companies.
Immigration has increased since Australia reopened to skilled migrants and international students in late 2021, with population growth of 2.2 percent at levels last seen in the early 1950s.
The rental situation is now so tight that younger people are turning to home sharing.
A survey by Flatmates.com.au found that a room in Warriewood on Sydney’s northern beaches typically costs $600 per week, slightly higher than Darling Point in the eastern suburbs, where $590 is the going rate.
Mr Partridge blamed the long wait for development applications to be approved by councils and the lack of new land for the housing crisis, especially in Sydney.
429,580 migrants moved to Australia in the year to September, official data on permanent and long-term arrivals shows (pictured are houses under construction in Oran Park in Sydney’s far south west)
“If you can get them done today in New South Wales within eight months, you’re doing well,” he said.
“The cheapest piece of land available in Sydney today costs about $850,000 for a 400 square meter block – that’s an absolute disaster in that area.”
The average house price in Sydney has risen 12.1 per cent since January, reaching $1.397 million in October, CoreLogic data shows.
The increase occurred despite the Reserve Bank raising interest rates for the thirteenth time in eighteen months in November, taking the cash rate to a twelve-year high of 4.35 percent.
Apartment prices in Sydney have risen eight per cent this year to $832,222.
Mr Partridge called for city planning to focus on low-rise units that are cheaper to build, rather than high-rise towers with lifts and air-conditioning units that use more electricity and take much longer to complete.
“Once you have a high-rise you quadruple the cost of construction – they automatically become unaffordable and consume huge amounts of energy,” Mr Partridge said.
Brickworks posted an underlying net profit after tax of $508 million in the last financial year, but this represented a decline of 32 percent.